The cryptocurrency economy has lost heavily in the last six months, falling 48.70% from $3.08 trillion to today’s $1.58 trillion. While cryptocurrency markets look extremely bearish these days, some cryptocurrency advocates believe the bear market will be less severe this time around. In addition, there is a rare scenario that the price of bitcoin could turn around and see a triple top, although it is common to say in the world of finance that “there are no triple tops.”
The chances of bitcoin facing a triple top scenario are rare, but could happen
Five days ago, Bitcoin.com News reported on a theory that bitcoin (BTC) prices are experiencing a milder bear market compared to the more than 80% declines of the leading crypto-asset recorded in the past. The theory is justified by bitcoin price peaks in the past and recent peaks recorded in May and November 2021.
While BTC reached $64K in May and $69K in November, these two peaks were much smaller than previous bullish cycle gains. Apparently, BTC‘s price experienced what is known as a double top. Now, in line with the theory that the current market downturn will be a milder bearish run, there is also the rare possibility of a triple top scenario.
Basically, if a triple top scenariooccurs. , BTC‘fiat value will reach the same resistance it touched during the last downturn. For example, after BTC hit a high of $64K in mid-May 2021, its value fell to a low of $31K on June 21, 2021. The price then soared again, reaching $69K on November 10, 2021.
If a triple top formation occurs, the upcoming bottom will be around the $31K mark when another reversal begins. In order for this to happen, BTC would need to see a complete reversal from the same resistance levels, and the third top could be equal to and just above or just below the $69K area.
The reversal theories are considered “hopium” because many people do not want to bet on such a risky play
Of course, many will assume that triple top theories are based on pure faith and “hopium”. In the trading world, triple tops are very rare, and quadruple tops do not seem to exist. In 2019, Allstarcharts.com analyst JC said: “We rarely see triple tops, and I can’t even say if I’ve ever seen a quadruple top. Betting on such outcomes never seems to pay off.”
This means that betting that bitcoin (BTC) will experience a triple top is a very risky bet compared to betting on the formation of a double top. Moreover, it is common in the trading world to say that statement:
There is no such thing as a triple top.
Although it is customary to say that “there are no triple tops,” this observation is not entirely accurate. They have certainly occurred in financial market scenarios in the past, and traders who have taken the risk of betting on them have reaped the rewards. Nevertheless, when a triple top does form and complete, “the party is officially over.” When a triple top is formed, price begins a bearish decline until the next price cycle regains bullish strength.
While many are probably still willing to bet on the formation of a triple top with respect to the price of bitcoin, it is even more likely that they are not willing to bet on a seemingly non-existent quadruple top. Moreover, if triple tops are so rare, it means that many traders are not willing to bet that a third top is just around the corner. The likelihood of BTC a triple top is not out of the question, and no one can say with certainty that this scenario will not materialize.
What do you think about the chances of the bitcoin price forming a triple top after reaching the next resistance level? Let us know what you think about it in the comments section below.
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